Birch Mountain Resources Ltd. (AMEX: BMD) shares closed at $3.63 today, up 48 cents, or 15 percent in afternoon trading. The company announced today it signed a three-year contract with Suncor Energy Inc. (AMEX: TSX) for the supply of construction aggregates from its Muskeg Valley Quarry.Though the company said the terms of the contract are confidential, Joel Jarding, president and CEO of Birch Mountain said this is the first long-term aggregate of its kind in the oil sands of Alberta.
“Shifting to longer-term contracts as opposed to the historical spot market is a strategic opportunity for Birch Mountain with mutual benefit to the customer,” Jarding said. “This contract confirms Birch Mountain as a reliable supplier of high-quality aggregates in the oil sands region, with the reserves to enter into longer-term arrangements. We look forward to partnering with Suncor and delivering value to their expanding operations.”
During the past 40 years, Suncor has expanded its capacity of synthetic crude oil in Athabasca, Alberta, to an average of 260,000 barrels per day. The company recently announced its intentions to grow to 550,000 by the next decade.
Founded in 1995, Birch Mountain now owns properties in Indonesia, British Columbia, the Yukon Territory, Manitoba, and Alberta. By 1998 however, the company’s primary focus is on the Athabasca property.
Currently, Birch Mountain’s Muskeg Valley Quarry is operating two 12-hour shifts, running 24/7 to process aggregates to multiple specifications to meet the demands of construction projects in the Fort McMurray oil sands region.
